The repercussions from the EU changes to interchange fees on credit and charge cards continue to filter through the market.
One way a card issuer can circumvent the 0.3% cap on fees is to issue ‘business’ cards as these are not capped. The reason for this was quoted on ft.com yesterday in an article about Curve:
We are supportive of the exclusion of commercial cards from the interchange cap as they are very important to the UK. Commercial Cards are a very different product compared to consumer cards, offering merchants, cardholders, and companies / governments providing them to their employees / civil servants specific and sophisticated services, which come at a higher cost to issuers. Unlike consumer cards, which compete with cash, commercial cards do not replace cash but traditional invoicing, which is a less efficient, less transparent, and more costly form means of payments. Commercial cards are also important in supporting small businesses as a vehicle for flexible short term financing. Capping interchange fees for Commercial cards would make issuers reconsider their issuance.
How you define a ‘commercial’ card is a complex question of course. Some people I have asked believe that a commercial card will, in future, need to be settled from a business bank account.
(These cards come with generous sign-up bonuses by the way. Gold Business offers 20,000 Membership Rewards points whilst Platinum Business offers 40,000 points.)
Here is the wording sent out:
“We will add new wording to your Agreement to clarify that you and any Supplementary Cardmembers may only use the Card for business purposes. This means that you and any Supplementary Cardmembers must not use the card for personal expenditure.”
There is also another change of the rules which means that supplementary cardholders no longer have any liability for the spending they make. The primary cardholder is solely responsible for settling their bill.
I am only guessing, but I assume that this is because Amex has verified that the primary cardholder is ‘in business’ and so can hold a commercial card. If the supplementary cardholder – who would usually be an employee – was liable for their own spending it could be used as evidence that Amex was issuing cards to ‘non business people’.
It isn’t clear whether Amex will deliberately start to close down Gold Business and Platinum Business accounts if it sees large volumes of personal spending going through. They may feel they have no choice if the alternative is to lose their ability to charge a higher interchange fee. At the moment, however, this is a moot point because the cap on interchange fees does not currently apply to Gold and Platinum Amex cards as I understand it.
Want to earn more points from credit cards? – September 2021 update
If you are looking to apply for a new credit or charge card, here are our September 2021 recommendations based on the current sign-up bonus.
The following offers will end soon:
- 2,000 Virgin Points on Virgin Atlantic Reward Mastercard (ends 15th October)
- 30,000 Virgin Points on Virgin Atlantic Reward+ Mastercard (ends 15th October)
- 10,000 Avios on British Airways American Express (ends 2nd November)
- 40,000 Avios on British Airways American Express Premium Plus (ends 2nd November)
- 60,000 points on The Platinum Card from American Express (ends 2nd November)
- 30,000 points on American Express Preferred Rewards Gold (ends 9th November)
Here are the top current deals:
British Airways American Express
10,000 Avios for signing up, no annual fee and an Economy 241 voucher for spending ….. Read our full review
British Airways American Express Premium Plus
40,000 Avios and the UK’s most valuable credit card perk – the 2-4-1 companion voucher Read our full review
American Express Preferred Rewards Gold
Your best beginner’s card – 30,000 points, FREE for a year & two airport lounge passes Read our full review
The Platinum Card from American Express
60,000 points and an unbeatable set of travel benefits – for a fee Read our full review
Virgin Atlantic Reward Mastercard
The UK’s most generous free Visa or Mastercard at 0.75 points / £1 Read our full review
Virgin Atlantic Reward+ Mastercard
30,000 points bonus and the most generous non-Amex for day to day spending Read our full review
Earning miles and points from small business cards
If you are a sole trader or run a small company, you may also want to check out these offers.
American Express Business Gold
20,000 points sign-up bonus and free for a year Read our full review
American Express Business Platinum
40,000 points sign-up bonus and a long list of travel benefits Read our full review
British Airways Accelerating Business American Express
60,000 Avios sign-up bonus – plus annual bonuses of up to 30,000 Avios Read our full review
Capital On Tap Business Rewards Visa
The most generous Avios Visa or Mastercard for a limited company Read our full review
For a non-American Express option, we also recommend the Barclaycard Select Cashback card for sole traders and small businesses. It is FREE and you receive 1% cashback on your spending: